Answer Key to Exercise Chapter 1

Answer Key to Exercise Chapter 1 - SOLUTIONS TO BRIEF...

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Unformatted text preview: SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 1-1 (a) $90,000 – $50,000 = $40,000 (Stockholders’ equity) (b) $45,000 + $85,000 = $130,000 (Assets) (c) $97,000 – $62,000 = $35,000 (Liabilities) BRIEF EXERCISE 1-2 1. $90,000 + $280,000 = $370,000 (Total assets) 2. $210,000 – $90,000 = $120,000 (Total liabilities) 3. $900,000 – 0.5($900,000) = $450,000 (Stockholders’ equity) BRIEF EXERCISE 1-3 1. ($850,000 + $150,000) – ($500,000 – $80,000) = $580,000 (Stockholders’ equity) 2. ($500,000 + $100,000) + ($850,000 – $500,000 – $50,000) = $900,000 (Assets) 3. ($850,000 – $90,000) – ($850,000 – $500,000 + $130,000) = $280,000 (Liabilities) BRIEF EXERCISE 1-4 Assets Liabilities Stockholders’ Equity (a) (b) (c) + + – + NE NE NE + – BRIEF EXERCISE 1-5 Assets Liabilities Stockholders’ Equity (a) (b) (c) + – NE NE NE NE + – NE BRIEF EXERCISE 1-6 E (a) Advertising expense A (e) Cash R (b) Commission revenue R (f) Rent revenue E (c) Insurance expense E (g) Utilities expense A (d) Office equipment L (h) Accounts payable BRIEF EXERCISE 1-7 R (a) Received cash for services performed NSE (b) Paid cash to purchase equipment E (c) Paid employee salaries BRIEF EXERCISE 1-8 SAMANTHA COMPANY Balance Sheet December 31, 2002 Assets Cash ..........................................................................................................................$ 40,500 Accounts receivable.................................................................................................................. 61,000 Total assets..................................................................................................................... $101,500 Liabilities and Stockholders’ Equity Liabilities Accounts payable........................................................................................................... $ 70,000 Stockholders’ equity Common stock............................................................................................................... 31,500 Total liabilities and stockholders’ equity.......................................................... $101,500 BRIEF EXERCISE 1-9 A (a) Accounts receivable A (d) Office supplies L (b) Salaries payable SE (e) Common stock A (c) Equipment L (f) Notes payable BRIEF EXERCISE 1-10 BS (a) Notes payable BS (d) Cash IS (b) Advertising expense IS (e) Service revenue BS (c) Common stock SOLUTIONS TO EXERCISES EXERCISE 1-1 Asset Liability Stockholders’ Equity Cash Cleaning equipment Cleaning supplies Accounts receivable Accounts payable Notes payable Salaries payable Common stock EXERCISE 1-2 1. Increase in assets and increase in stockholders’ equity. 2. Decrease in assets and decrease in stockholders’ equity....
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Answer Key to Exercise Chapter 1 - SOLUTIONS TO BRIEF...

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